During its infancy stage, the US automotive industry was dominated by a small number of firms. While these firms were unable to produce mass volumes, they still accounted for a large share of the market. Several decades later, the industry experienced an influx of European, Japanese, and Korean automakers. Many of these new entrants began offering products that were perceived as comparable and/or superior in value, thereby leading to intense competition in the market. From a competitive standpoint, this is indicative as ________.
1) A shift from oligopoly to monopolistic competition.
2) A shift from monopoly to oligopoly structure.
3) A change from pure competition to monopolistic competition.
4) A change from monopolistic environment to pure competition.
5) The change in industry cost structure from fixed to variable costs.
